Registration
No.
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE SECURITIES ACT OF 1933
ESPORTS
ENTERTAINMENT GROUP, INC.
(Exact
name of registrant as specified in its charter)
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Nevada
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26-3062752
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(State
or other jurisdiction of
incorporation
or organization)
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(I.R.S.
Employer
Identification
Number)
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13/14
Penthouse Office, Mannarino Road
Birkirkara,
Malta, BKR 9080
356
2713 1276
(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)
(Address,
including zip code, and telephone number, including area code, of agent for service)
Copies
to:
Joseph
M. Lucosky, Esq.
Lawrence
Metelitsa, Esq.
Lucosky
Brookman LLP
101
Wood Avenue South, 5th Floor
Iselin,
NJ 08830
(732)
395-4400
APPROXIMATE
DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time to time after the effective date of this registration statement.
If
the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please
check the following box. [ ]
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check
the following box. [X]
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering. [ ]
If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If
this Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become
effective on filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. [ ]
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register
additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following
box. [ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated
filer” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange
Act. (Check one):
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Large
accelerated filer
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[ ]
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Accelerated
filer
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[ ]
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Non-accelerated
filer
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[X]
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Smaller
reporting company
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[X]
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Emerging
growth company
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[ ]
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CALCULATION
OF REGISTRATION FEE
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Title
of Each Class of Securities to be Registered (1)(2)
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Amount
to be
Registered (1)
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Proposed
Maximum Offering Price per Share or Unit (1) (2)
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Proposed
Maximum Aggregate Offering Price (3)
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Amount
of
Registration Fee (3)
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Offering:
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Common Stock
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Preferred Stock
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Debt Securities (which may be senior
or subordinated, convertible or non-convertible, secured or unsecured)
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Warrants
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Units (4)
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Total (5)
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$
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100,000,000
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100
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%
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$
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100,000,000
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$
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10,910.00
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(1)
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Pursuant
to Rule 457(i) under the Securities Act of 1933, as amended (the “Securities Act), the securities registered hereunder
include such indeterminate (a) number of shares of common stock, (b) number of shares of preferred stock, (c) debt securities,
(d) warrants to purchase common stock, preferred stock or debt securities of the Registrant, and (e) units, consisting of
some or all of these securities, as may be sold from time to time by the Registrant. Any securities registered hereunder may
be sold separately or as units with other securities registered hereunder. There are also being registered hereunder an indeterminate
number of shares of common stock, preferred stock and debt securities as shall be issuable upon conversion, exchange or exercise
of any securities that provide for such issuance. In no event will the aggregate offering price of all types of securities
issued by the Registrant pursuant to this registration statement exceed $100,000,000. Pursuant to Rule 416(a), this registration
statement also covers any additional securities that may be offered or issued in connection with any stock split, stock dividend
or similar transaction.
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(2)
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The
proposed maximum per unit and aggregate offering prices per class of securities will be determined from time to time by the
Registrant in connection with the issuance by the Registrant of the securities registered under this registration statement
and is not specified as to each class of security pursuant to General Instruction II.D of Form S-3 under the Securities Act.
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(3)
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Calculated
pursuant to Rule 457(o) under the Securities Act.
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(4)
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Consisting
of some or all of the securities listed above, in any combination, including common stock, preferred stock, debt securities,
and warrants.
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(5)
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Any
securities registered hereunder may be sold separately or as units with other securities registered hereunder. The proposed
maximum offering price per unit will be determined by the Registrant in connection with the issuance of the securities. In
no event will the aggregate offering price of all securities issued by the Registrant from time to time pursuant to this Registration
Statement exceed $100,000,000 or the equivalent thereof in one or more foreign currencies, foreign currency units or composite
currencies.
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The
registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until
the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The
information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement
filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it
seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
Subject
to Completion, dated January __, 2021.
PROSPECTUS
ESPORTS
ENTERTAINMENT GROUP, INC.
$100,000,000
Common
Stock
Preferred
Stock
Debt
Securities
Warrants
Rights
Units
We
may offer and sell up to $100 million in the aggregate of the securities identified above from time to time in one or more offerings.
This prospectus provides you with a general description of the securities.
Each
time we offer and sell securities, we will provide a supplement to this prospectus that contains specific information about the
offering and the amounts, prices and terms of the securities. The supplement may also add, update or change information contained
in this prospectus with respect to that offering. You should carefully read this prospectus and the applicable prospectus supplement
before you invest in any of our securities.
We
may offer and sell the securities described in this prospectus and any prospectus supplement to or through one or more underwriters,
dealers and agents, or directly to purchasers, or through a combination of these methods. If any underwriters, dealers or agents
are involved in the sale of any of the securities, their names and any applicable purchase price, fee, commission or discount
arrangement between or among them will be set forth, or will be calculable from the information set forth, in the applicable prospectus
supplement. See the sections of this prospectus entitled “About this Prospectus” and “Plan of Distribution”
for more information. No securities may be sold without delivery of this prospectus and the applicable prospectus supplement describing
the method and terms of the offering of such securities.
INVESTING
IN OUR SECURITIES INVOLVES RISKS. SEE THE “RISK FACTORS” ON PAGE 13 OF THIS PROSPECTUS
AND ANY SIMILAR SECTION CONTAINED IN THE APPLICABLE PROSPECTUS SUPPLEMENT CONCERNING FACTORS YOU SHOULD CONSIDER BEFORE INVESTING
IN OUR SECURITIES.
Our
common stock and Unit A Warrants are quoted for trading on The NASDAQ Capital Market under the symbols “GMBL” and
“GMBLW”, respectively. On January 22, 2021, the last reported sale price of our common stock and Unit A Warrants
on The NASDAQ Capital Market was $7.47, and $4.33, per share, and Unit A Warrant, respectively.
The aggregate market value of our outstanding
common stock held by non-affiliates is $77,654,751.25 based on 14,186,740 shares of outstanding common stock, of
which 4,294,415 are held by affiliates, and a per share price of $7.85 based on the closing sale price of our common
stock on January 20, 2020. Pursuant to General Instruction I.B.6 of Form S-3, in no event will we sell our common stock
in a public primary offering with a value exceeding more than one-third of our public float in any 12-month period so long as
our public float remains below $75,000,000. We have not offered any securities pursuant to General Instruction I.B.6. of Form
S-3 during the prior 12 calendar month period that ends on and includes the date of this prospectus.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The
date of this prospectus is , 2021.
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the U.S. Securities and Exchange Commission, or the SEC, using
a “shelf” registration process. By using a shelf registration statement, we may sell securities from time to time
and in one or more offerings up to a total dollar amount of $100 million as described in this prospectus. Each time that we offer
and sell securities, we will provide a prospectus supplement to this prospectus that contains specific information about the securities
being offered and sold and the specific terms of that offering. The prospectus supplement may also add, update or change information
contained in this prospectus with respect to that offering. If there is any inconsistency between the information in this prospectus
and the applicable prospectus supplement, you should rely on the prospectus supplement. Before purchasing any securities, you
should carefully read both this prospectus and the applicable prospectus supplement, together with the additional information
described under the heading “Where You Can Find More Information; Incorporation by Reference.”
We
have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We will not make an offer to sell these securities in any jurisdiction where the offer
or sale is not permitted. You should assume that the information appearing in this prospectus and the applicable prospectus supplement
to this prospectus is accurate as of the date on its respective cover, and that any information incorporated by reference is accurate
only as of the date of the document incorporated by reference, unless we indicate otherwise. Our business, financial condition,
results of operations and prospects may have changed since those dates.
When
we refer to “Esports,” “EEG,” “we,” “our,” “us” and the “Company”
in this prospectus, we mean Esports Entertainment Group, Inc., unless otherwise specified. When we refer to “you,”
we mean the holders of the applicable series of securities.
WHERE
YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE
Available
Information
We
file reports, proxy statements and other information with the SEC. Information filed with the SEC by us can be inspected and copied
at the Public Reference Room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of
this information by mail from the Public Reference Room of the SEC at prescribed rates. Further information on the operation of
the SEC’s Public Reference Room in Washington, D.C. can be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains
a web site that contains reports, proxy and information statements and other information about issuers, such as us, who file electronically
with the SEC. The address of that website is http://www.sec.gov.
Our
website address is https://esportsentertainmentgroup.com. The information on our website, however, is not, and should not
be deemed to be, a part of this prospectus.
This
prospectus and any prospectus supplement are part of a registration statement that we filed with the SEC and do not contain all
of the information in the registration statement. The full registration statement may be obtained from the SEC or us, as provided
below. Forms of the documents establishing the terms of the offered securities are or may be filed as exhibits to the registration
statement. Statements in this prospectus or any prospectus supplement about these documents are summaries and each statement is
qualified in all respects by reference to the document to which it refers. You should refer to the actual documents for a more
complete description of the relevant matters. You may inspect a copy of the registration statement at the SEC’s Public Reference
Room in Washington, D.C. or through the SEC’s website, as provided above.
Incorporation
by Reference
The
SEC’s rules allow us to “incorporate by reference” information into this prospectus, which means that we can
disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated
by reference is deemed to be part of this prospectus, and subsequent information that we file with the SEC will automatically
update and supersede that information. Any statement contained in a previously filed document incorporated by reference will be
deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus
modifies or replaces that statement.
We
incorporate by reference our documents listed below and any future filings made by us with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act” in this prospectus,
between the date of this prospectus and the termination of the offering of the securities described in this prospectus. We are
not, however, incorporating by reference any documents or portions thereof, whether specifically listed below or filed in the
future, that are not deemed “filed” with the SEC, including any information furnished pursuant to Items 2.02 or 7.01
of Form 8-K or related exhibits furnished pursuant to Item 9.01 of Form 8-K.
This
prospectus and any accompanying prospectus supplement incorporate by reference the documents set forth below that have previously
been filed with the SEC:
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Our
Annual Report on Form 10-K for the year ended June 30, 2020, filed with the SEC on October 1, 2020;
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Our
Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, filed with the SEC on November 16, 2020;
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Our
Current Reports on Form 8-K and/or 8-K/A filed with the SEC on August 6, 2020, October 16, 2020, November 24, 2020, December
8, 2020, December 17, 2020, and January 22, 2021; and
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The
description of our Common Stock contained in our Registration Statement on Form S-8, filed with the SEC on November 25, 2020,
as amended, and any amendment or report filed with the SEC for the purpose of updating the description.
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All
reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of this offering, including all such documents we may file with the SEC after the date of the initial registration
statement and prior to the effectiveness of the registration statement, but excluding any information furnished to, rather than
filed with, the SEC, will also be incorporated by reference into this prospectus and deemed to be part of this prospectus from
the date of the filing of such reports and documents.
You
may request a free copy of any of the documents incorporated by reference in this prospectus (other than exhibits, unless they
are specifically incorporated by reference in the documents) by writing or telephoning us at the following address:
Esports
Entertainment Group, Inc.
13/14
Penthouse Office, Mannarino Road
Birkirkara,
Malta, BKR 9080
356
2713 1276
Exhibits
to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus
and any accompanying prospectus supplement.
THE
COMPANY
Corporate
History
Esports
Entertainment Group, Inc. was formed in the State of Nevada on July 22, 2008 under our prior name Virtual Closet, Inc. Virtual
Closet, Inc. changed its name to DK Sinopharma, Inc. on June 6, 2010. DK Sinopharma, Inc. changed its name to VGambling, Inc.
on August 12, 2014. On or about April 24, 2017, VGambling, Inc. changed its name to Esports Entertainment Group, Inc. Our company
was engaged in a number of different enterprises up until May 20, 2013, when, pursuant to the terms of the Share Exchange Agreement,
we acquired all of the outstanding capital stock of H&H Arizona Corporation in exchange for 3,333,334 shares of our common
stock. From May 2013 until August 2018, our operations were limited to designing, developing and testing our wagering systems.
We launched our online esports wagering website (www.vie.gg) in August 2018.
Business
Overview
Esports
is the competitive playing of video games by amateur and professional teams for cash prizes. Esports typically takes the form
of organized, multiplayer video games that include real-time strategy, fighting, first-person shooter and multiplayer online battle
arena games. During 2020, the three largest selling esports games were Dota 2, League of Legends (each multiplayer
online battle arena games) and Counter Strike: Global Offensive (a first-person shooter game). Other popular games include
Smite, StarCraft II, Call of Duty¸ Heroes of the Storm, Hearthstone and Fortnite.
Esports also includes games which can be played, primarily by amateurs, in multiplayer competitions on the Sony PlayStation, Microsoft
Xbox and Nintendo Switch. Most major professional esports events and a wide range of amateur esports events are broadcast live
via streaming services including twitch.tv, azubu.tv, ustream.tv and youtube.com.
We
are an esports entertainment and online gambling company primarily focused on three verticals, (i): esports entertainment, (ii)
esports wagering, and (iii) iGaming and traditional sports betting. We believe focusing on these verticals positions the Company
to take advantage of a trending and expanding marketplace in esports with the rise of competitive gaming as well as the legalization
of online gambling in the United States.
Esports
Entertainment:
Our
esports entertainment vertical includes any activity that we pursue within esports that does not include real-money wagering.
Right now, the main component of this vertical is our skill-based tournament platform. This allows us to engage and monetize players
across 41 states where skill-based gambling is legal as well as create relationships with players that can eventually migrate
to our Vie.gg real-money wagering platform.
Esports
Wagering:
We
intend to be a leader in the large and rapidly growing sector of esports real-money wagering. Our Vie.gg platform offers fans
the ability to wager on professional esports events in a licensed and secure environment. At the current time, under the terms
of our existing Curacao license, we are currently able to accept wagers from residents of over 149 jurisdictions including Canada,
Japan, Germany and South Africa. On April 30, 2020, we received our gaming service license from the Malta Gaming Authority (MGA).
We now expect that residents in a number of European Union member states will be able to place bets on our website. On August
20, 2020, we announced that we entered into a multi-year partnership with Twin River Worldwide Holdings, Inc (NYSE: TRWH) to launch
our proprietary mobile sports betting product in the state of New Jersey. We intend to have our platform live in the state by
the end of the first quarter of 2021.
iGaming
and Traditional Sports Betting:
The
goal of our iGaming and traditional Sports Betting vertical is to provide profitable growth and access to strategic licenses in
jurisdictions that we can cross-sell into our Vie.gg platform. On July 7, 2020, we entered into a stock purchase agreement (the
“Argyll Purchase Agreement”), by and among the Company, LHE Enterprises Limited (“LHE”), and AHG Entertainment,
LLC (“AHG”) whereby, upon closing on July 31, 2020, the Company acquired all of the outstanding capital stock of LHE
and its subsidiaries, (i) Argyll Entertainment AG, (ii) Nevada Holdings Limited and (iii) Argyll Productions Limited (collectively
the “Acquired Companies” or “Argyle”). AHG is licensed and regulated by the UK Gambling Commission and
the Irish Revenue Commissioners to operate online sportsbook and casino sites in the UK and Ireland, respectively. Argyll has
a flagship brand, www.SportNation.bet, as well as two white label brands, www.RedZone.bet and www.uk.Fansbet.com
(collectively the “Argyll Brands”), with over 250K registered players at the end of calendar year 2020.
Competitive
Advantages/Operational Strengths
We
believe the following strengths position us for sustainable growth:
Management
Team and Key Personnel Experience: Our Board includes senior managers with extensive experience in online gambling, esports,
information technology, compliance, regulation, accounting and finance. Our Officers and management include individuals with extensive
experience in online gambling, esports, information technology, marketing, business development, payment processing, compliance,
regulation, accounting, finance and customer service.
Licensed
Technology/Proprietary B2C wagering platform: We have entered into a White Label Services Agreement dated December 12,
2019 (the “Askott Agreement”) with a subsidiary of Askott Entertainment Inc. (“Askott”) whereby Esports
has secured a non-exclusive license to “white label” Askott’s proprietary software and systems as the platform
through which we run our business (the “Platform”). The Platform requires complex code and very skilled development.
Accordingly, we believe the complexity of our Platform offers a higher barrier to entry than standard wagering platforms. Furthermore,
in September 10, 2020, we acquired certain intellectual property assets developed by FLIP Sports (“Flip Sports”).
As part of the acquisition of assets, the Flip employees became employees of Argyll Productions Ltd, a subsidiary of LHE, with
the intention to have them build a best-in-class proprietary esports wagering platform. We believe our proprietary platform will
provide us with a competitive advantage as it offers what we believe to be the widest variety of betting options available for
esports wagering.
Argyll’s
“Rewards” Program: built in-house, and in conjunction with FLIP Sports, provides an industry-leading customer
loyalty program, driving above-industry customer retention rates and player lifetime values. The Program helped earn Argyll the
Innovative Start-up of the Year award, at the 2018 EGR Marketing & Innovation Awards. We believe the platform can be leveraged
across all of our verticals.
Affiliate
Marketing Program: Our affiliate marketing program focuses on professional esports teams and individual social
media influencers. As part of our efforts to market our online gaming services, we attempt to enter into “Affiliate Marketing
Agreements” with professional esports teams and other influential individuals and groups within esports. As an “Marketing
Affiliate”, the esports team will provide their fans with a link to our online gaming website, where the fan, if located
in a country which allows the fan to place a bet using our gaming platform, can bet on teams playing in esports tournaments. For
a player placing a bet through the marketing affiliate’s link to our website and provided such player wins the bet, we pay
the “Marketing Affiliate” a percentage of the amount we collect from the winning bet (typically between 25% - 35%).
Growth
Strategy
In
the future, we intend to:
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expand
our Esports services into more of the 41 states where skill-based gambling is legal, enhance the Product offering, as well
as create relationships with players that will migrate into our Vie.gg real-money wagering platform.
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expand
our Esports Wagering services into more jurisdictions, utilizing the recently acquired MGA gaming license, as well as the
recent multi-year partnership with Twin River Worldwide Holdings, Inc (NYSE: TRWH) to launch our proprietary mobile sports
betting product in the state of New Jersey.
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continue
with our M&A strategy in the iGaming and Traditional Sports Betting space, to acquire profitable Operators in different
jurisdictions, that will also allow for cross-pollination of services (Sportsbook, Casino and Esports).
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Future
Products and Services:
Online
Esports Tournament Play
We
intend to offer players from around the world, including the United States (except in 13 states in the US and other jurisdictions
outside the US which currently prohibit playing games of skill for cash prizes), the ability to enter and participate in online
video game tournaments and win cash prizes. Online esports tournament play consists of two or more people playing against each
other in a game from their personal phones or computers, where such players do not necessarily have to be playing in real time.
These events could be held over the course of a day, a week or even a month and the winner will be the one with the top score
or the fastest time at the conclusion of the event. Cash-based tournaments involving games of skill are not considered gambling
in most U.S. states because the generally accepted definition of gambling involves three specific things: (1) the award of a prize,
(2) paid-in consideration (meaning entrants pay to compete) and (3) an outcome determined on the basis of chance. As a result,
games of skill are not generally subject to the same laws and regulations as our esports event wagering service. We expect participants
in our tournaments being able to enter and play against each other with prize money distributed to the last remaining competitors.
We anticipate collecting a tournament entry fee for our tournaments, as well as a percentage of total winnings that are paid to
users (typically 10% of the entry fees) and thus none of our money will be at risk or otherwise dependent on the outcome. We intend
to offer users a wide selection of video games of skill to be played online for real money in small groups to major tournaments.
The tournament platform will also serve as a tool to help us determine which markets we are finding the most esports players.
We believe using the tournament platform to penetrate the US market will allow us to grow our brand within the esports community
and lead to lower customer-acquisition-costs for our wagering platform.
US
Market Expansion
Currently
we do not offer players in the US the ability to wager on our Vie.gg platform. However, on August 20, 2020, we announced that
we entered into a multi-year partnership with Twin River Worldwide Holdings, Inc (NYSE: TRWH) to launch our proprietary mobile
sports betting product in the state of New Jersey. We intend to have our platform live in the state by the end of the first quarter
of 2021. Following our launch in New Jersey, we intend to evaluate additional jurisdictions in the US that could be commercially
viable for further expansion of our Vie.gg platform.
International
Market Expansion
We
received a Gaming Service License for online pool betting from the Malta Gaming Authority in April 2020, established a brick and
mortar office in such jurisdiction and anticipate commencing online gaming operations in that jurisdiction in 2020, both on the
Vie.gg and Argyll Brands. We expect that residents of a number of both European Union and non-EU countries will be able to place
bets on our website. In the future, we may consider obtaining additional country specific gaming licenses should we determine
there is sufficient local demand for our services in these markets. In order to effectively penetrate international markets, we
intend to translate our website into several additional languages and offer customer service and technical support in the local
language of key markets.
Our
Online Wagering Platforms
According
to Zion Market Research’s, Online Gambling & Betting Market by Game Form (Poker, Casino, Sports Betting, Bingo,
Lottery, Horse Racing Betting, and Others) and by Component (Hardware, Software, and Service): Global Industry Perspective,
Comprehensive Analysis and Forecast, 2017 – 2024, the online gambling market represents one of the fastest growing
segments of the gambling industry. Zion Market estimated the size of the global online gambling market in 2018 was in excess
of US$45.8 billion and is projected to reach US$94.4 billion by 2024.
Although
the Vie.gg brand is focused solely on offering online wagering on the widest range of esports events broadcast from around the
world, the Argyll Brands offer online users traditional casino style games such as poker, craps or slots, as well as offering
online wagering on traditional sporting events such as soccer, horse racing and football.
All
persons 18 years and older can presently place bets on our online gambling website at www.vie.gg except for residents of the United
States and other jurisdictions that the Company is precluded from supplying its services to pursuant to its gaming licenses.
With
respect to our Argyll Brands, wagering is only permitted by customers in the United Kingdom and Republic of Ireland.
On
April 30, 2020, the Company received its Gaming Service License for online pool betting from the Malta Gaming Authority. This
allows residents of certain European Union member countries to place bets on our website.
Once
on our websites, a player can place a bet on a team participating in any number of tournaments which are scheduled to be held
in the upcoming weeks. We also maintain a “how to play” section on the website which provides players with instructional
videos on placing bets as well as other pieces of information that may be beneficial to an inexperienced player or a new user
of our website. Additionally, we maintain a “frequently asked questions” section which provides our customers with
the ability to easily navigate general questions relating to the website, personal account information, payment processing, betting
rules and procedures as well as tips.
We
have agreements with the following third party companies that provide us with certain services that enable our website to function
efficiently:
Money
Matrix. MoneyMatrix provides us with the software we use to receive payments from players. Using MoneyMatrix, a player can
select from over 150 payment options (i.e. Skrill, Astropay) to deposit funds with us for use in placing bets.
Partner
Matrix. Partner Matrix provides us with the software we use to track players placing a bet through an Affiliate’s link
to our website.
Money
Matrix, Partner Matrix are both paid monthly for their services to the Company.
Askott
Entertainment Inc. The Vie.gg Platform is hosted from Askott Entertainment Inc., who provides us with a website hosting subscription,
and provides e-games, development and IT services related to the software interface and web design. We will pay the Askott subsidiary
a percentage on gaming revenues, this percentage varies based on the amount of monthly gaming revenues generated but shall not
exceed twenty-percent (20%) of monthly gaming revenues but gradually decreases based on increased revenues. Additionally, we will
pay Askott a minimum monthly fee of $9,000 EUR for services which amount will be subject to increase based on the number of games
made available on the Platform.
SB
Tech Global – the Argyll Brands use the SB Tech platform to host their websites, and pay a percentage on both Sportsbook
and Casino Gross Gaming revenues, as well as certain hosting and data feed fees.
Marketing
and Sales Initiatives
The
Company has several sponsorship marketing agreements in place for its website as well as an extended marketing agreement with
Dignitas, an esports brand owned by Harris Blitzer sports and entertainment with multiple professional teams playing several titles
with over a million fans worldwide. The Company also has an agreement with Allied Esports to run esports tournaments to promote
the brand globally to esports fans.
We
are looking to expand into new geographic territories by obtaining licenses to operate in those territories. The need for hands-on
implementation in these territories and support will require investment in additional marketing activities, offices, and other
overhead.
We
will also accelerate our expansion if we find complementary businesses that we are able to acquire in other markets. Our marketing
efforts to expand into new territories have included esports team and tournament sponsorship, affiliate marketing, social media
advertising, content creation, and attendance at esports and gaming events in addition to personal contact with other industry
leaders.
Esports
games are played by professional teams, amateur teams, and individuals. Professional esports teams have their own social media
presence, with some of the top professional teams having millions of fans who follow and interact with the team on a regular basis.
A website of a professional esports team usually contains specific information about the team and lists upcoming tournaments or
events in which the team will be participating. As part of our efforts to market our online gaming services, we attempt to enter
into affiliate marketing agreements with professional Esports teams.
As
a marketing affiliate, the esports team will promote our brand in the content they create and on their social media and Website.
The fans will be provided with a link to our online gaming website, where the Fan, if located in a country that allows the fan
to place a bet using our gaming platform, can bet on teams playing in esports tournaments. For a player placing a bet through
the team’s link to our website (and provided the player won the bet), we pay the Affiliate a percentage of the amount we
collect from the winning bet. As of December 1, 2020, we had more than 75 esports teams agreeing to act as our marketing
affiliates.
We
plan to increase our marketing efforts and awareness of our websites, www.vie.gg and www.sportnation.bet, as well
as future offerings by:
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Educating
sports betting consumers to bet on esports and we want gamers to start betting on esports.
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Sponsoring
professional esports teams and tournaments that have a global reach.
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Working
with sports and gaming celebrities and social media influencers who have an interest in video games and esports to generate
new customers. We intend to increase our efforts in attracting esports players and other celebrities who have an interest
in video games and esports.
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Using
a multichannel approach focused on acquiring and retaining customers we intend to utilize multiple social media platforms
to promote the Company’s wagering business including, but not limited to, Facebook Twitter, Instagram, Snapchat, TikTok,
Youtube, Twitch, Whatsapp, QQ, WeChat, email and SMS messages and using online advertisements, paid search optimization, and
various social media campaigns to increase our online presence and drive traffic to our website. We intend to increase our
investments in online advertisements, including esports gambling-related websites. We also intend to continue to invest in
optimizing the Company’s website so it will attain a high ranking under key search words or phrases, such as “esports
gambling.”
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Competition
The
online gambling and wagering industry is increasingly competitive. With relatively low barriers to entry, new competitors are
entering the esports wagering and video game tournament segments. In both of these segments, there currently exist several major
competitors. Because many of these competitors focus on delivering one product, as opposed to a full suite of esports and video
gambling products and services that we intend to offer, the competitors may offer an equivalent or superior product to that of
the Company. We expect the number of companies offering products and services in each market segment to increase. Most of our
current competitors, including Unikrn, bet365, William Hill, Betway, and Pinnacle Sports, have far greater resources than we have.
In
the UK, where Argyll is heavily concentrated, the competition in the online gambling industry is extremely competitive. As of
June 2020, the UK Gambling Commission oversaw 3,641 gambling licenses, held by 2,652 gaming operators, which makes competing for
the acquisition and retention of customers, continually challenging.
We
believe the following differentiates us from our competitors:
The
Vie.gg brand is focused solely on esports gambling and 18+ gaming. We will not offer users traditional casino style games like
poker, craps or slots nor do we anticipate offering wagering on traditional sporting events like football or soccer. We are focused
solely on delivering the widest selection of content and offering the widest range of esports events all for real-money wagering.
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Strength
of Argyll proposition:
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With
the industry reaching saturation point with similar offers around bonuses and free bets, often with complex terms and conditions,
Argyll’s vision and ambition was to launch a totally unique in-house product, seamlessly in to SportNation.bet, to provide
customers with an experience like no other, while tackling one of the major challenges that any operator faces; retention. That
product and concept is our Rewards Program.
Argyll’s
Rewards Program offers customers a simple and genuinely rewarding loyalty scheme, where every bet on the site, win, lose or draw,
earns points to redeem into our “Reward Store”. No turnover requirements, no minimum odds conditions, no new customer
or single-use restrictions.
We
have developed an in house, turnover based model to reward customers with points based on their activity. Customers earn points
faster by increasing the number of selections in sportsbook bets, providing an opportunity to increase the rate at which points
are earned.
Customers
are able to select when and how they want to redeem. A customer is not bound to certain activity or staking criteria. A customer
can decide when and what they want to redeem, which could either be frequently, or allowing customers to save for a larger item.
As
an extension to the already unique Rewards offering that SportNation provides its users, a range of product enhancements have
also been integrated in to SportNation, including live streaming, responsible gaming and compliance tools and data driven customized
journeys. All integrations have been designed and developed in house, to align with the feel and tone of the site. By combining
research and insight with the latest technology to implement real time solutions, SportNation offers an innovative, safe and responsible
product that is tailored to each individual user, on and offsite, from registration and throughout their customer lifetime.
Regulations
Affecting our Business
The
offering and operation of online real-money gambling platforms and related software and solutions is subject to extensive regulation
and approval by various national, federal, state, provincial, tribal and foreign agencies (collectively, “gaming authorities”).
Gambling laws require us to obtain licenses or findings of suitability from gaming authorities for Esports Entertainment, including
each of our subsidiaries engaged in these activities, and certain of our directors, officers, employees and in some instances,
significant shareholders (typically beneficial owners of more than 5% of a company’s outstanding equity). The criteria used
by gambling authorities to make determinations as to qualification and suitability of an applicant varies among jurisdictions,
but generally require the submission of detailed personal and financial information followed by a thorough and sometimes lengthy
investigation. Gaming authorities have broad discretion in determining whether an applicant qualifies for licensing or should
be found suitable. Gambling authorities generally look to the following criteria when determining to grant a license or finding
of suitability, including (i) the financial stability, integrity and responsibility of the applicant, (ii) the quality and security
of the applicant’s online real-money platform and gaming equipment and related software, as applicable, and (iii) the past
history of the applicant. Gambling authorities may, subject to certain administrative proceeding requirements, (i) deny an application,
or limit, condition, restrict, revoke or suspend any license, registration, finding of suitability or approval, and (ii) fine
any person licensed, registered or found suitable or approved. Notwithstanding the foregoing, some jurisdictions explicitly prohibit
gaming in all or certain forms and we will not market our gambling services in these jurisdictions. If any director, officer or
employee of ours fails to qualify for a license or is found unsuitable (including due to the failure to submit the required documentation)
by a gaming authority, we may deem it necessary, or be required to, sever our relationship with such person, which may include
terminating the employment of any such person. Gambling authorities have the right to investigate any individual or entity having
a material relationship with us, to determine whether such individual or entity is suitable or should be licensed to do business
as a business associate of ours. In addition, certain gambling authorities monitor the activities of the entities they regulate
both in their respective jurisdiction and in other jurisdictions to ensure that these entities are in compliance with local standards
on a worldwide basis.
On
May 14, 2018, the Supreme Court of the United States struck down the Professional and Amateur Sports Protection Act, a 1992 law
that barred state-authorized sports gambling with some exceptions and made Nevada the only state where a person could wager on
the results of a single game. Since the Supreme Court’s decision, sports gambling has commenced in several states and several
more states have enabling legislation pending. We believe that the Supreme Court’s decision will allow our platform to be
used in the United States at some point in the future. We plan to explore expansion of our esports online wagering platform into
the US market place at the appropriate time.
The
Unlawful Internet Gambling Enforcement Act of 2006 (“UIEGA”) made it a federal offense, punishable by up to five years
in prison, for a business to accept payments “in connection with the participation of another person in unlawful internet
gambling.” In support of such new prohibitions, the UIGEA uses a variety of terms — some of which are ambiguous or
undefined. Initially, the UIGEA broadly defines a “bet or wager” as: the staking or risking by any person of something
of value upon the outcome of a contest of others, a sporting event, or a game subject to chance, upon an agreement or understanding
that the person or another person will receive something of value in the event of a certain outcome.
Further,
a “bet or wager” specifically includes a chance on a lottery or prize awarded predominantly by chance; a “scheme”
as defined in Title 28, U.S.C. § 3702 relating to government-sponsored amateur or professional sports betting and, “any
instructions or information pertaining to the establishment or movement of funds by the bettor or customer in, to, or from, an
account with the business of betting or wagering.” While this final prohibition incorporates the term “business of
betting or wagering,” that term is not specifically defined anywhere in the UIGEA. The only reference to that term comes
in § 5362(2), which states: The term “business of betting or wagering” does not include the activities of a financial
transaction provider, or any interactive computer service or telecommunications service.
Nonetheless,
the law does contain specific prohibitions. In order to establish a violation of the UIGEA, it must be shown that:
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A
“person” was engaged in the business of betting or wagering;
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That
person knowingly accepted a financial instrument or proceeds thereof; and
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3.
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That
instrument was accepted (by the person) in connection with the participation of another person in “unlawful Internet
gambling.”
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In
the context of this statute “unlawful Internet gambling” is defined as follows:
To
place, receive, or otherwise knowingly transmit a bet or wager by any means which involves the use, at least in part, of the Internet
where such bet or wager is unlawful under any applicable Federal or State law in the state or tribal lands in which the bet or
wager is initiated, received, or otherwise made.
Therefore,
the UIGEA only applies to online gambling transactions that are already prohibited by other state, federal, or tribal laws. Therefore,
in order for the financial transaction to be prohibited by § 5363 of the UIGEA, the bet or wager must be “initiated,
received, or otherwise made” in a place where such activity (the bet of wager) violates preexisting state, federal, or tribal
law.
At
the current time, we are able to accept wagers on our vie.gg website from residents of over 149 jurisdictions including Canada,
Japan, Germany and South Africa. We do not accept wagers from United States residents at this time and therefore the bet or wager
on our platform is not “initiated, received, or otherwise made” in a place where such activity violates preexisting
state, federal, or tribal law.
Great
Britain
Betting
and gaming with respect to customers in Great Britain (England, Scotland and Wales, but excluding Northern Ireland, the Channel
Islands and the Isle of Man) is regulated by the Gambling Act 2005 (the “2005 Act”). The 2005 Act established the
Gambling Commission as the regulator responsible for granting licenses to operate gambling services as well as overseeing compliance
with applicable law and regulation. In 2014, the UK Parliament passed the Gambling (Licensing and Advertising) Act 2014, which
required all remote gambling operators serving customers in Great Britain or advertising in Great Britain to obtain a license
from the Gambling Commission. Our Argyll Brands operate in the UK pursuant to remote operating licences issued by the Gambling
Commission along with the separate software and “key personnel” individual licenses. Various additional operating
subsidiaries of EEG are endorsed upon the licenses and are hence authorized to carry out the licensed activities on a so-called
“umbrella” basis in addition to the “primary” licensee. The terms of these operating licenses require
that the relevant subsidiaries of EEG must source all gambling software used in connection with British players from the holder
of a gambling software licenses issued by the Gambling Commission. So long as the applicable license fees are paid and the British
licenses are not suspended, revoked or otherwise surrendered, EEG expects that the licenses will remain valid indefinitely.
British
regulations require licensed companies to file quarterly returns as well as a more extensive “annual assurance statement”
to provide the Gambling Commission with information regarding matters such as significant changes in control systems, risk management
and governance since the last assurance statement, how the licensee is addressing gambling by problem and at-risk customers and
any improvements that the licensee plans to implement to its control systems, risk management and governance and/or its approach
to addressing problem and at-risk gambling and promoting socially responsible gambling. The Gambling Commission also subjects
its licensees to periodical regulatory compliance visits subsequent to which recommendations may be issued to the licensee.
Intellectual
Property
We
have not filed to register any patents, trade names or trademarks in any jurisdictions in relation to our Vie.gg brand, but we
do intend to file applications to register patents, tradenames or trademarks in the near future.
Argyll
owns a European Union registered trade mark for its SportNation brand.
Our
Risks and Challenges
An
investment in our securities involves a high degree of risk. You should carefully consider the risks summarized below. The risks
are discussed more fully in the “Risk Factors” section of this prospectus immediately following this prospectus summary.
These risks include, but are not limited to, the following:
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We
are a development stage company with a limited operating history.
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The
gaming and interactive entertainment industries are intensely competitive. Esports faces competition from a growing number
of companies and, if Esports is unable to compete effectively, its business could be negatively impacted.
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We
have a history of accumulated deficits, recurring losses and negative cash flows from operating activities. We may be unable
to achieve or sustain profitability
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The
failure to enforce and maintain our intellectual property rights could enable others to use trademarks used by our business
which could adversely affect the value of the Company.
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The
Company may be subject to claims of intellectual property infringement or invalidity and adverse outcomes of litigation could
unfavorably affect its operating results.
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Compromises
of the Company’s systems or unauthorized access to confidential information or EEG’s customers’ personal
information could materially harm EEG’s reputation and business.
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There
is a risk that the Company’s network systems will be unable to meet the growing demand for its online products.
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Systems,
network or telecommunications failures or cyber-attacks may disrupt the Company’s business and have an adverse effect
on EEG’s results of operations.
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Malfunctions
of third-party communications infrastructure, hardware and software expose Esports to a variety of risks Esports cannot control.
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Recent
Developments
Lucky
Dino Purchase Agreement
On
December 14, 2020, the Company, via its wholly owned subsidiary, Esports Entertainment (Malta) Limited (“EEL”), entered
into an asset purchase agreement (the “Lucky Dino Purchase Agreement”), by and among EEL, Lucky Dino Gaming Limited,
a company registered in Malta (“Lucky Dino”), and Hiidenkivi Estonia OU, a company registered in Estonia (“HEOU”
and, together with Lucky Dino, the “Sellers”) whereby EEL purchased and assumed from the Sellers substantially all
the assets and assumed certain specified liabilities of the Sellers’ business of real money online casino gaming (the “Acquired
Business”).
As
consideration for the Acquired Business, the Company agreed to pay the Sellers EUR €25,000,000 (the “Lucky Dino Purchase
Price”) subject to certain adjustments set forth in the Lucky Dino Purchase Agreement.
The
Lucky Dino Purchase Agreement contains customary representations, warranties, covenants, indemnification and other terms for transactions
of this nature. The closing of the transactions contemplated by the Lucky Dino Purchase Agreement is subject to certain conditions,
including, among other things, the completion of an audit of Lucky Dino and HEOU.
Phoenix
Purchase Agreement
On December 17, 2020, the Company entered
into a share purchase agreement (the “Purchase Agreement”), by and among the Company, Phoenix Games Network Limited,
a company registered in England and Wales (“Phoenix”), and the shareholders of Phoenix (the “Phoenix Shareholders”
and, together with Phoenix, the “Selling Parties”), whereby the Company acquired from the Selling Parties all of the
issued and outstanding share capital of Phoenix (the “Phoenix Shares”). Pursuant to the Purchase Agreement, as
consideration for the Phoenix Shares, the Company agreed to pay the Sellers: (i) GBP £1,000,000 (the “Original
Cash Consideration”); and (ii) shares of common stock of the Company, par value $0.0001 per share, in the aggregate
value of GBP£3,000,000 (the “Original Share Consideration” and, together with the Cash Consideration,
the “Original Purchase Price”), subject to adjustment based on certain revenue milestones as outlined therein.
On January 21, 2021, the Company and Sellers,
having met all conditions precedent, consummated the closing for the Phoenix Shares pursuant to the terms of the Purchase Agreement.
The Original Purchase Price was adjusted at closing and as consideration for the Phoenix Shares, the Company paid the Sellers:
(i) GBP £350,000 (US $493,495.35) (the “Closing Cash Consideration”); and (ii) 292,211 shares of common
stock of the Company, par value $0.0001 per share (aggregate value of $1,927,647.49) (the “Closing Share Consideration”
and, together with the Cash Closing Consideration, the “Closing Purchase Price”). The Closing Cash Consideration was
be paid in US Dollars and was calculated in accordance with the applicable exchange rate on the Closing Date (as such
term is defined in the Purchase Agreement). The Sellers shall remain eligible to receive the remainder of the Original Purchase
Price upon Phoenix meeting the aforementioned Revenue Targets by May 16, 2021.
Pursuant to the Purchase Agreement, the Selling
Parties shall be entitled to receive an additional GBP£2,000,000 if Phoenix has reached certain revenue milestones by the
18 month anniversary of the Closing Date as further outlined therein.
The Purchase Agreement contains customary representations,
warranties, covenants, indemnification and other terms for transactions of a similar nature.
RISK
FACTORS
Investment
in any securities offered pursuant to this prospectus and the applicable prospectus supplement involves risks. You should carefully
consider the risk factors incorporated by reference to our Registration Statement on Form S-1, filed with the SEC on June 19,
2020, as amended, our most recent Annual Report on Form 10-K and any subsequent Quarterly Reports on Form 10-Q or Current Reports
on Form 8-K we file after the date of this prospectus, and all other information contained or incorporated by reference into this
prospectus, as updated by our subsequent filings under the Exchange Act, and the risk factors and other information contained
in the applicable prospectus supplement before acquiring any of such securities. The occurrence of any of these risks might cause
you to lose all or part of your investment in the offered securities.
SPECIAL
NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains forward-looking statements that involve risks and uncertainties, principally in the sections entitled “Risk
Factors.” All statements other than statements of historical fact contained in this prospectus, including statements regarding
future events, our future financial performance, business strategy and plans and objectives of management for future operations,
are forward-looking statements. We have attempted to identify forward-looking statements by terminology including “anticipates,”
“believes,” “can,” “continue,” “could,” “estimates,” “expects,”
“intends,” “may,” “plans,” “potential,” “predicts,” “should,”
or “will” or the negative of these terms or other comparable terminology. Although we do not make forward looking
statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are
only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined under “Risk
Factors” or elsewhere in this prospectus, which may cause our or our industry’s actual results, levels of activity,
performance or achievements expressed or implied by these forward-looking statements.
Forward-looking
statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications
of the times at, or by which, that performance or those results will be achieved. Forward-looking statements are based on information
available at the time they are made and/or management’s good faith belief as of that time with respect to future events,
and are subject to risks and uncertainties that could cause actual performance or results to differ materially from what is expressed
in or suggested by the forward-looking statements.
Forward-looking
statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume
no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors
affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more
forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking
statements.
USE
OF PROCEEDS
We
intend to use the net proceeds from the sale of the securities as set forth in the applicable prospectus supplement.
DESCRIPTION
OF CAPITAL STOCK
Introduction
In
the discussion that follows, we have summarized selected provisions of our certificate of incorporation, bylaws and the Nevada
Revised Statutes relating to our capital stock. This summary is not complete. This discussion is subject to the relevant provisions
of Nevada law and is qualified by reference to our certificate of incorporation and our bylaws. You should read the provisions
of our certificate of incorporation and our bylaws as currently in effect for provisions that may be important to you.
On
January 28, 2020, we effected a 1-for-15 reverse stock split of our outstanding common stock, which caused our then outstanding
common stock to decrease from 93,395,890 to 6,227,006 while keeping our authorized capitalization unchanged.
Authorized
Capital Stock
We
are currently authorized to issue up to 510,000,000 shares of capital stock consisting of: 500,000,000 shares of common stock,
par value $0.001 per share and 10,000,000 shares of preferred stock, par value of $0.001 per share. As of January 21, 2021,
14,186,740 shares of common stock were issued and outstanding and there were no shares of preferred stock outstanding.
Common
Stock
We
are authorized to issue 500,000,000 shares of common stock. Holders of our common stock are each entitled to cast one vote for
each share held of record on all matters presented to the shareholders. Cumulative voting is not allowed; hence, the holders of
a majority of our outstanding common shares can elect all directors.
Holders
of our common stock are entitled to receive such dividends as may be declared by our board of directors out of funds legally available
and, in the event of liquidation, to share pro rata in any distribution of our assets after payment of liabilities. Our board
of directors is not obligated to declare a dividend. It is not anticipated that dividends will be paid in the foreseeable future.
Holders
of our common stock do not have preemptive rights to subscribe to additional shares if issued. There is no conversion, redemption,
sinking fund or similar provisions regarding the common stock. All outstanding shares of common stock are fully paid and non-assessable.
Preferred
Stock
We
are authorized to issue 10,000,000 shares of preferred stock. Shares of preferred stock may be issued from time to time in one
or more series as may be determined by our board of directors. The voting powers and preferences, the relative rights of each
such series and the qualifications, limitations and restrictions of each series will be established by the board of directors.
Our directors may issue preferred stock with multiple votes per share and dividend rights which would have priority over any dividends
paid with respect to the holders of our common stock. The issuance of preferred stock with these rights may make the removal of
management difficult even if the removal would be considered beneficial to shareholders generally, and will have the effect of
limiting shareholder participation in transactions such as mergers or tender offers if these transactions are not favored by our
management. As of the date of this prospectus, we had not issued any shares of preferred stock.
Unit
A Warrants
Exercisability.
The Unit A Warrants are exercisable immediately upon issuance and at any time up to the date that is five years from the date
of issuance. The Unit A Warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a
duly executed exercise notice accompanied by payment in full for the number of shares of our common stock purchased upon such
exercise (except in the case of a cashless exercise as discussed below). Unless otherwise specified in the warrant, the holder
will not have the right to exercise any portion of the warrant if the holder (together with its affiliates) would beneficially
own in excess of 4.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise
(or, upon election by a Holder prior to the issuance of any Unit A Warrants, 9.99%), as such percentage ownership is determined
in accordance with the terms of the Unit A Warrants.
Cashless
Exercise. In the event that a registration statement covering shares of common stock underlying the Unit A Warrants, is not
available for the issuance of such shares of common stock underlying the Unit A Warrants, the holder may, in its sole discretion,
exercise the warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to be made to us upon
such exercise in payment of the aggregate exercise price, elect instead to receive upon such exercise the net number of shares
of common stock determined according to the formula set forth in the warrant. In no event shall we be required to make any cash
payments or net cash settlement to the registered holder in lieu of issuance of common stock underlying the Unit A Warrants.
Certain
Adjustments. The exercise price and the number of shares of common stock purchasable upon the exercise of the Unit A Warrants
are subject to adjustment upon the occurrence of specific events, including stock dividends, stock splits, combinations and reclassifications
of our common stock.
Transferability.
Subject to applicable laws, the Unit A Warrants may be transferred at the option of the holders upon surrender of the Unit
A Warrants to our Transfer Agent together with the appropriate instruments of transfer.
Warrant
Agent and Exchange Listing. The Unit A Warrants will be issued in registered form under a warrant agency agreement between
Vstock Transfer LLC, as warrant agent, and us.
Fundamental
Transactions. If, at any time while the Unit A Warrants are outstanding, (1) we consolidate or merge with or into another
corporation and we are not the surviving corporation, (2) we sell, lease, license, assign, transfer, convey or otherwise dispose
of all or substantially all of our assets, (3) any purchase offer, tender offer or exchange offer (whether by us or another individual
or entity) is completed pursuant to which holders of our shares of common stock are permitted to sell, tender or exchange their
shares of common stock for other securities, cash or property and has been accepted by the holders of 50% or more of our outstanding
shares of common stock, (4) we effect any reclassification or recapitalization of our shares of common stock or any compulsory
share exchange pursuant to which our shares of common stock are converted into or exchanged for other securities, cash or property,
or (5) we consummate a stock or share purchase agreement or other business combination with another person or entity whereby such
other person or entity acquires more than 50% of our outstanding shares of common stock, each a “Fundamental Transaction,”
then upon any subsequent exercise of the Unit A Warrants, the holder thereof will have the right to receive the same amount and
kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction
if it had been, immediately prior to such Fundamental Transaction, the holder of the number of warrant shares then issuable upon
exercise of the warrant, and any additional consideration payable as part of the Fundamental Transaction.
Rights
as a Stockholder. Except as otherwise provided in the Unit A Warrants or by virtue of such holder’s ownership of shares
of our common stock, the holder of a warrant does not have the rights or privileges of a holder of our common stock, including
any voting rights, until the holder exercises the warrant.
Beneficial
Ownership Limitation. Holder’s exercise shall be limited 4.99% of the Company’s outstanding common stock (or,
upon election by a Holder prior to the issuance of any Unit A Warrants, 9.99%) of the number of shares of the common stock outstanding
immediately after giving effect to the issuance of shares of common stock issuable upon exercise. The Holder, upon notice to the
Company, may increase or decrease the beneficial ownership limitation provided that the beneficial ownership limitation in no
event exceeds 9.99% of the number of shares of the common stock outstanding immediately after giving effect to the issuance of
shares of common stock upon exercise of the warrant held by the Holder. Any increase in the beneficial ownership limitation will
not be effective until the 61st day after such notice is delivered to the Company.
Governing
Law. The Unit A Warrants and the warrant agency agreement are governed by New York law.
Unit
B Warrants
Exercisability.
The Unit B Warrants are exercisable immediately upon issuance and at any time up to the date that is one year from the date
of issuance. The Unit B Warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a
duly executed exercise notice accompanied by payment in full for the number of shares of our common stock purchased upon such
exercise. Unless otherwise specified in the Unit B Warrant, the holder will not have the right to exercise any portion of the
Unit B Warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% of the number of shares
of our common stock outstanding immediately after giving effect to the exercise (or, upon election by a Holder prior to the issuance
of any Unit B Warrants, 9.99%), as such percentage ownership is determined in accordance with the terms of the Unit B Warrants.
Certain
Adjustments. The exercise price and the number of shares of common stock purchasable upon the exercise of the Unit B Warrants
are subject to adjustment upon the occurrence of specific events, including stock dividends, stock splits, combinations and reclassifications
of our common stock.
Transferability.
Subject to applicable laws, the Unit B Warrants may be transferred at the option of the holders upon surrender of the Unit
B Warrants to our Transfer Agent together with the appropriate instruments of transfer.
Fundamental
Transactions. If, at any time while the Unit B Warrants are outstanding, (1) we consolidate or merge with or into another
corporation and we are not the surviving corporation, (2) we sell, lease, license, assign, transfer, convey or otherwise dispose
of all or substantially all of our assets, (3) any purchase offer, tender offer or exchange offer (whether by us or another individual
or entity) is completed pursuant to which holders of our shares of common stock are permitted to sell, tender or exchange their
shares of common stock for other securities, cash or property and has been accepted by the holders of 50% or more of our outstanding
shares of common stock, (4) we effect any reclassification or recapitalization of our shares of common stock or any compulsory
share exchange pursuant to which our shares of common stock are converted into or exchanged for other securities, cash or property,
or (5) we consummate a stock or share purchase agreement or other business combination with another person or entity whereby such
other person or entity acquires more than 50% of our outstanding shares of common stock, each a “Fundamental Transaction,”
then upon any subsequent exercise of the Unit B Warrants, the holder thereof will have the right to receive the same amount and
kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction
if it had been, immediately prior to such Fundamental Transaction, the holder of the number of warrant shares then issuable upon
exercise of the Unit B Warrant, and any additional consideration payable as part of the Fundamental Transaction.
Rights
as a Stockholder. Except as otherwise provided in the Unit B Warrants or by virtue of such holder’s ownership of shares
of our common stock, the holder of a Unit B Warrant does not have the rights or privileges of a holder of our common stock, including
any voting rights, until the holder exercises the Unit B Warrant.
Beneficial
Ownership Limitation. Holder’s exercise shall be limited 4.99% of the Company’s outstanding common stock (or,
upon election by a Holder prior to the issuance of any Unit B Warrants, 9.99%) of the number of shares of the common stock outstanding
immediately after giving effect to the issuance of shares of common stock issuable upon exercise. The Holder, upon notice to the
Company, may increase or decrease the beneficial ownership limitation provided that the beneficial ownership limitation in no
event exceeds 9.99% of the number of shares of the common stock outstanding immediately after giving effect to the issuance of
shares of common stock upon exercise of the Unit B Warrant held by the Holder. Any increase in the beneficial ownership limitation
will not be effective until the 61st day after such notice is delivered to the Company.
Governing
Law. The Unit B Warrants are governed by New York law.
Unit
1 and Unit 2 Warrants
Upon
consummation of the April 2020 Offering, all the Bridge Notes were mandatorily converted (the “Bridge Note Conversion”).
Pursuant to the terms of the Bridge Purchase Agreements, the Investors received shares of the Company’s common stock at
discount to the April 2020 Offering as well as two warrants (the “Unit 1 Warrants” and “Unit 2 Warrants”)
to purchase shares of Common Stock of the Company, with each to purchase one share of Common Stock with an exercise price per
share of $4.25
The
Unit 1 Warrants are substantially the same as the Unit A Warrants, except that (i) the Unit 1 Warrants are not traded on the Nasdaq;
(ii) the Unit 1 Warrants do not contain a cashless exercise provision; and (iii) there is no warrant agent associated with the
Unit 1 Warrants.
The
Unit 2 Warrants are substantially the same as the Unit B Warrants, except that there is no warrant agent associated with Unit
2 Warrants.
Authorized
but Unissued Shares
Our
authorized but unissued shares of common stock and preferred stock will be available for future issuance without shareholder approval,
except as may be required under the listing rules of any stock exchange on which our common stock is then listed. We may use additional
shares for a variety of corporate purposes, including future public offerings to raise additional capital, corporate acquisitions
and employee benefit plans. The existence of authorized but unissued shares of common stock and preferred stock could render more
difficult or discourage an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.
Limitation
on Directors’ Liability
The
Nevada Revised Statutes limits or eliminates the personal liability of directors to corporations and their stockholders for monetary
damages for breaches of directors’ fiduciary duties as directors. Our Amended and Restated Bylaws include provisions that
require the company to indemnify our directors or officers against monetary damages for actions taken as a director or officer
of our Company. We are also expressly authorized to carry directors’ and officers’ insurance to protect our directors,
officers, employees and agents for certain liabilities. Our Amended and Restated Articles of Incorporation do not contain any
limiting language regarding director immunity from liability.
The
limitation of liability and indemnification provisions under the Nevada Revised Statutes and our Amended and Restated Bylaws may
discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. These provisions may also
have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action,
if successful, might otherwise benefit us and our stockholders. However, these provisions do not limit or eliminate our rights,
or those of any stockholder, to seek non-monetary relief such as injunction or rescission in the event of a breach of a director’s
fiduciary duties. Moreover, the provisions do not alter the liability of directors under the federal securities laws. In addition,
your investment may be adversely affected to the extent that, in a class action or direct suit, we pay the costs of settlement
and damage awards against directors and officers pursuant to these indemnification provisions.
Nevada
Anti-Takeover Statute
We
may be subject to Nevada’s Combination with Interested Stockholders Statute (Nevada Corporation Law Sections 78.411-78.444)
which prohibits an “interested stockholder” from entering into a “combination” with the corporation, unless
certain conditions are met. An “interested stockholder” is a person who, together with affiliates and associates,
beneficially owns (or within the prior two years, did beneficially own) 10% or more of the corporation’s capital stock entitled
to vote.
The
NASDAQ Capital Market Listing
Our
common stock and Unit A Warrants are quoted for trading on The NASDAQ Capital Market under the symbols “GMBL” and
“GMBLW”, respectively.
Transfer
Agent
The
transfer agent and registrar for our common stock is VStock Transfer, LLC with an address at 18 Lafayette Pl, Woodmere, NY 11598.
DESCRIPTION
OF DEBT SECURITIES
General
The
debt securities that we may offer by this prospectus consist of notes, debentures, or other evidences of indebtedness. The debt
securities may constitute either senior or subordinated debt securities, and in either case may be either secured or unsecured.
Any debt securities that we offer and sell will be our direct obligations. Debt securities may be issued in one or more series.
All debt securities of any one series need not be issued at the same time, and unless otherwise provided, a series of debt securities
may be reopened, with the required consent of the holders of outstanding debt securities, for issuance of additional debt securities
of that series or to establish additional terms of that series of debt securities (with such additional terms applicable only
to unissued or additional debt securities of that series). The form of indenture has been filed as an exhibit to the registration
statement of which this prospectus is a part and is subject to any amendments or supplements that we may enter into with the trustee(s),
however, we may issue debt securities not subject to the indenture provided such terms of debt securities are not otherwise required
to be set forth in the indenture. The material terms of the indenture are summarized below and we refer you to the indenture for
a detailed description of these material terms. Additional or different provisions that are applicable to a particular series
of debt securities will, if material, be described in a prospectus supplement relating to the offering of debt securities of that
series. These provisions may include, among other things and to the extent applicable, the following:
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the
title of the debt securities, including, as applicable, whether the debt securities will be issued as senior debt securities,
senior subordinated debt securities or subordinated debt securities, any subordination provisions particular to the series
of debt securities;
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any
limit on the aggregate principal amount of the debt securities;
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whether
the debt securities are senior debt securities or subordinated debt securities and applicable subordination provisions, if
any;
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whether
the debt securities will be secured or unsecured;
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if
other than 100% of the aggregate principal amount, the percentage of the aggregate principal amount at which we will sell
the debt securities, such as an original issuance discount;
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the
date or dates, whether fixed or extendable, on which the principal of the debt securities will be payable;
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the
rate or rates, which may be fixed or variable, at which the debt securities will bear interest, if any, the date or dates
from which any such interest will accrue, the interest payment dates on which we will pay any such interest, the basis upon
which interest will be calculated if other than that of a 360-day year consisting of twelve 30-day months, and, in the case
of registered securities, the record dates for the determination of holders to whom interest is payable;
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the
place or places where the principal of and any premium or interest on the debt securities will be payable and where the debt
securities may be surrendered for conversion or exchange;
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whether
we may, at our option, redeem the debt securities, and if so, the price or prices at which, the period or periods within which,
and the terms and conditions upon which, we may redeem the debt securities, in whole or in part, pursuant to any sinking fund
or otherwise;
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if
other than 100% of the aggregate principal amount thereof, the portion of the principal amount of the debt securities which
will be payable upon declaration of acceleration of the maturity date thereof or provable in bankruptcy, or, if applicable,
which is convertible or exchangeable;
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any
obligation we may have to redeem, purchase or repay the debt securities pursuant to any sinking fund or analogous provisions
or at the option of a holder of debt securities, and the price or prices at which, the currency in which and the period or
periods within which, and the terms and conditions upon which, the debt securities will be redeemed, purchased or repaid,
in whole or in part, pursuant to any such obligation, and any provision for the remarketing of the debt securities;
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the
issuance of debt securities as registered securities or unregistered securities or both, and the rights of the holders of
the debt securities to exchange unregistered securities for registered securities, or vice versa, and the circumstances under
which any such exchanges, if permitted, may be made;
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the
denominations, which may be in United States Dollars or in any foreign currency, in which the debt securities will be issued,
if other than denominations of $1,000 and any integral multiple thereof;
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whether
the debt securities will be issued in the form of certificated debt securities, and if so, the form of the debt securities
(or forms thereof if unregistered and registered securities are issuable in that series), including the legends required by
law or as we deem necessary or appropriate, the form of any coupons or temporary global security which may be issued and the
forms of any other certificates which may be required under the indenture or which we may require in connection with the offering,
sale, delivery or exchange of the debt securities;
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if
other than United States Dollars, the currency or currencies in which payments of principal, interest and other amounts payable
with respect to the debt securities will be denominated, payable, redeemable or repurchasable, as the case may be;
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whether
the debt securities may be issuable in tranches;
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the
obligations, if any, we may have to permit the conversion or exchange of the debt securities into common stock, preferred
stock or other capital stock or property, or a combination thereof, and the terms and conditions upon which such conversion
or exchange will be effected (including conversion price or exchange ratio), and any limitations on the ownership or transferability
of the securities or property into which the debt securities may be converted or exchanged;
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if
other than the trustee under the indenture, any trustees, authenticating or paying agents, transfer agents or registrars or
any other agents with respect to the debt securities;
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any
deletions from, modifications of or additions to the events of default with respect to the debt securities or the right of
the Trustee or the holders of the debt securities in connection with events of default;
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any
deletions from, modifications of or additions to the covenants with respect to the debt securities;
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if
the amount of payments of principal of, and make-whole amount, if any, and interest on the debt securities may be determined
with reference to an index, the manner in which such amount will be determined;
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whether
the debt securities will be issued in whole or in part in the global form of one or more debt securities and, if so, the depositary
for such debt securities, the circumstances under which any such debt security may be exchanged for debt securities registered
in the name of, and under which any transfer of debt securities may be registered in the name of, any person other than such
depositary or its nominee, and any other provisions regarding such debt securities;
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whether,
under what circumstances and the currency in which, we will pay additional amounts on the debt securities to any holder of
the debt securities who is not a United States person in respect of any tax, assessment or governmental charge and, if so,
whether we will have the option to redeem such debt securities rather than pay such additional amounts, and the terms of any
such option;
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whether
the debt securities will be secured by any collateral and, if so, a general description of the collateral and the terms of
any related security, pledge or other agreements;
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the
persons to whom any interest on the debt securities will be payable, if other than the registered holders thereof on the regular
record date therefor; and
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any
other material terms or conditions upon which the debt securities will be issued.
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Unless
otherwise indicated in the applicable prospectus supplement, we will issue debt securities in fully registered form without coupons
and in denominations of $1,000 and in integral multiples of $1,000, and interest will be computed on the basis of a 360-day year
of twelve 30-day months. If any interest payment date or the maturity date falls on a day that is not a business day, then the
payment will be made on the next business day without additional interest and with the same effect as if it were made on the originally
scheduled date. “Business day” means any calendar day that is not a Saturday, Sunday or legal holiday in New York,
New York, and on which the trustee and commercial banks are open for business in New York, New York.
Unless
we inform you otherwise in a prospectus supplement, each series of our senior debt securities will rank equally in right of payment
with all of our other unsubordinated debt. The subordinated debt securities will rank junior in right of payment and be subordinate
to all of our unsubordinated debt.
Unless
otherwise indicated in the applicable prospectus supplement, the trustee will act as paying agent and registrar for the debt securities
under the indenture. We may act as paying agent under the indenture.
The
prospectus supplement will contain a description of United States federal income tax consequences relating to the debt securities,
to the extent applicable.
Covenants
The
applicable prospectus supplement will describe any covenants, such as restrictive covenants restricting us or our subsidiaries,
if any, from incurring, issuing, assuming or guarantying any indebtedness or restricting us or our subsidiaries, if any, from
paying dividends or acquiring any of our or its capital stock.
Consolidation,
Merger and Transfer of Assets
The
indenture permits a consolidation or merger between us and another entity and/or the sale, conveyance or lease by us of all or
substantially all of our property and assets, provided that:
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the
resulting or acquiring entity, if other than us, is organized and existing under the laws of a United States jurisdiction
and assumes all of our responsibilities and liabilities under the indenture, including the payment of all amounts due on the
debt securities and performance of the covenants in the indenture;
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immediately
after the transaction, and giving effect to the transaction, no event of default under the indenture exists; and
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we
have delivered to the trustee an officers’ certificate stating that the transaction and, if a supplemental indenture
is required in connection with the transaction, the supplemental indenture comply with the indenture and that all conditions
precedent to the transaction contained in the indenture have been satisfied.
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If
we consolidate or merge with or into any other entity, or sell or lease all or substantially all of our assets in compliance with
the terms and conditions of the indenture, the resulting or acquiring entity will be substituted for us in the indenture and the
debt securities with the same effect as if it had been an original party to the indenture and the debt securities. As a result,
such successor entity may exercise our rights and powers under the indenture and the debt securities, in our name and, except
in the case of a lease, we will be released from all our liabilities and obligations under the indenture and under the debt securities.
Notwithstanding
the foregoing, we may transfer all of our property and assets to another entity if, immediately after giving effect to the transfer,
such entity is our wholly owned subsidiary. The term “wholly owned subsidiary” means any subsidiary in which we and/or
our other wholly owned subsidiaries, if any, own all of the outstanding capital stock.
Modification
and Waiver
Under
the indenture, some of our rights and obligations and some of the rights of the holders of the debt securities may be modified
or amended with the consent of the holders of not less than a majority in aggregate principal amount of the outstanding debt securities
affected by the modification or amendment. However, the following modifications and amendments will not be effective against any
holder without its consent:
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a
change in the stated maturity date of any payment of principal or interest;
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a
reduction in the principal amount of or interest on any debt securities;
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an
alteration or impairment of any right to convert at the rate or upon the terms provided in the indenture;
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a
change in the currency in which any payment on the debt securities is payable;
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an
impairment of a holder’s right to sue us for the enforcement of payments due on the debt securities; or
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a
reduction in the percentage of outstanding debt securities required to consent to a modification or amendment of the indenture
or required to consent to a waiver of compliance with certain provisions of the indenture or certain defaults under the indenture.
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Under
the indenture, the holders of not less than a majority in aggregate principal amount of the outstanding debt securities may, on
behalf of all holders of the debt securities:
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waive
compliance by us with certain restrictive provisions of the indenture; and
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waive
any past default under the indenture in accordance with the applicable provisions of the indenture, except a default in the
payment of the principal of or interest on any series of debt securities.
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Events
of Default
Unless
we indicate otherwise in the applicable prospectus supplement, “event of default” under the indenture will mean, with
respect to any series of debt securities, any of the following:
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failure
to pay interest on any debt security for 30 days after the payment is due;
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failure
to pay the principal of any debt security when due, either at maturity, upon redemption, by declaration or otherwise;
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failure
on our part to observe or perform any other covenant or agreement in the indenture that applies to the debt securities for
90 days after we have received written notice of the failure to perform in the manner specified in the indenture; and
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certain
events of bankruptcy, insolvency or reorganization.
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Remedies
Upon an Event of Default
If
an event of default occurs and continues, the trustee or the holders of not less than 25% in aggregate principal amount of the
outstanding debt securities of such series may declare the entire principal of all the debt securities to be due and payable immediately,
except that, if the event of default is caused by certain events in bankruptcy, insolvency or reorganization, the entire principal
of all of the debt securities of such series will become due and payable immediately without any act on the part of the trustee
or holders of the debt securities. If such a declaration occurs, the holders of a majority of the aggregate principal amount of
the outstanding debt securities of such series can, subject to conditions, rescind the declaration.
The
indenture requires us to furnish to the trustee not less often than annually, a certificate from our principal executive officer,
principal financial officer or principal accounting officer, as the case may be, as to such officer’s knowledge of our compliance
with all conditions and covenants under the indenture. The trustee may withhold notice to the holders of debt securities of any
default, except defaults in the payment of principal of or interest on any debt securities if the trustee in good faith determines
that the withholding of notice is in the best interests of the holders. For purposes of this paragraph, “default”
means any event which is, or after notice or lapse of time or both would become, an event of default under the indenture.
The
trustee is not obligated to exercise any of its rights or powers under the indenture at the request, order or direction of any
holders of debt securities, unless the holders offer the trustee satisfactory security or indemnity. If satisfactory security
or indemnity is provided, then, subject to other rights of the trustee, the holders of a majority in aggregate principal amount
of the outstanding debt securities may direct the time, method and place of:
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conducting
any proceeding for any remedy available to the trustee; or
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exercising
any trust or power conferred upon the trustee.
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The
holder of a debt security will have the right to begin any proceeding with respect to the indenture or for any remedy only if:
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holder has previously given the trustee written notice of a continuing event of default;
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the
holders of not less than a majority in aggregate principal amount of the outstanding debt securities have made a written request
of, and offered reasonable indemnity to, the trustee to begin such proceeding;
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the
trustee has not started such proceeding within 60 days after receiving the request; and
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no
direction inconsistent with such written request has been given to the trustee under the indenture.
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However,
the holder of any debt security will have an absolute right to receive payment of principal of and interest on the debt security
when due and to institute suit to enforce this payment.
Satisfaction
and Discharge; Defeasance
Satisfaction
and Discharge of Indenture. Unless otherwise indicated in the applicable prospectus supplement, if at any time,
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we
have paid the principal of and interest on all the debt securities of any series, except for debt securities which have been
destroyed, lost or stolen and which have been replaced or paid in accordance with the indenture, as and when the same shall
have become due and payable, or
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we
have delivered to the trustee for cancellation all debt securities of any series theretofore authenticated, except for debt
securities of such series which have been destroyed, lost or stolen and which have been replaced or paid as provided in the
indenture, or
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all
the debt securities of such series not theretofore delivered to the trustee for cancellation have become due and payable,
or are by their terms are to become due and payable within one year or are to be called for redemption within one year, and
we have deposited with the trustee, in trust, sufficient money or government obligations, or a combination thereof, to pay
the principal, any interest and any other sums due on the debt securities, on the dates the payments are due or become due
under the indenture and the terms of the debt securities,
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then
the indenture shall cease to be of further effect with respect to the debt securities of such series, except for:
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rights
of registration of transfer and exchange, and our right of optional redemption;
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substitution
of mutilated, defaced, destroyed, lost or stolen debt securities;
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rights
of holders to receive payments of principal thereof and interest thereon upon the original stated due dates therefor (but
not upon acceleration) and remaining rights of the holders to receive mandatory sinking fund payments, if any;
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the
rights, obligations and immunities of the trustee under the indenture; and
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the
rights of the holders of such series of debt securities as beneficiaries thereof with respect to the property so deposited
with the trustee payable to all or any of them.
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Defeasance
and Covenant Defeasance. Unless otherwise indicated in the applicable prospectus supplement, we may elect with respect to
any debt securities of any series either:
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to
defease and be discharged from all of our obligations with respect to such debt securities (“defeasance”), with
certain exceptions described below; or
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to
be released from our obligations with respect to such debt securities under such covenants as may be specified in the applicable
prospectus supplement, and any omission to comply with those obligations will not constitute a default or an event of default
with respect to such debt securities (“covenant defeasance”).
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We
must comply with the following conditions before the defeasance or covenant defeasance can be effected:
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we
must irrevocably deposit with the indenture trustee or other qualifying trustee, under the terms of an irrevocable trust agreement
in form and substance satisfactory to the trustee, trust funds in trust solely for the benefit of the holders of such debt
securities, sufficient money or government obligations, or a combination thereof, to pay the principal, any interest and any
other sums on the due dates for those payments; and
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must deliver to the trustee an opinion of counsel to the effect that the holders of such debt securities will not recognize
income, gain or loss for federal income tax purposes as a result of defeasance or covenant defeasance, as the case may be,
to be effected with respect to such debt securities and will be subject to federal income tax on the same amount, in the same
manner and at the same times as would be the case if such defeasance or covenant defeasance, as the case may be, had not occurred.
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In
connection with defeasance, any irrevocable trust agreement contemplated by the indenture must include, among other things, provision
for:
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payment
of the principal of and interest on such debt securities, if any, appertaining thereto when due (by redemption, sinking fund
payments or otherwise),
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the
payment of the expenses of the trustee incurred or to be incurred in connection with carrying out such trust provisions,
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rights
of registration, transfer, substitution and exchange of such debt securities in accordance with the terms stated in the indenture,
and
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continuation
of the rights, obligations and immunities of the trustee as against the holders of such debt securities as stated in the indenture.
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The
accompanying prospectus supplement may further describe any provisions permitting or restricting defeasance or covenant defeasance
with respect to the debt securities of a particular series.
Global
Securities
Unless
otherwise indicated in the applicable prospectus supplement, each debt security offered by this prospectus will be issued in the
form of one or more global debt securities representing all or part of that series of debt securities. This means that we will
not issue certificates for that series of debt securities to the holders. Instead, a global debt security representing that series
will be deposited with, or on behalf of, a securities depositary and registered in the name of the depositary or a nominee of
the depositary. Any such depositary must be a clearing agency registered under the Exchange Act. We will describe the specific
terms of the depositary arrangement with respect to a series of debt securities to be represented by a global security in the
applicable prospectus supplement.
Notices
We
will give notices to holders of the debt securities by mail at the addresses listed in the security register. In the case of notice
in respect of unregistered securities or coupon securities, we may give notice by publication in a newspaper of general circulation
in New York, New York.
Governing
Law
The
particular terms of a series of debt securities will be described in a prospectus supplement relating to such series of debt securities.
Any indentures will be subject to and governed by the Trust Indenture Act of 1939, as amended, and may be supplemented or amended
from time to time following their execution. Unless otherwise stated in the applicable prospectus supplement, we will not be limited
in the amount of debt securities that we may issue, and neither the senior debt securities nor the subordinated debt securities
will be secured by any of our property or assets. Thus, by owning debt securities, you are one of our unsecured creditors.
Regarding
the Trustee
From
time to time, we may maintain deposit accounts and conduct other banking transactions with the trustee to be appointed under the
indenture or its affiliates in the ordinary course of business.
DESCRIPTION
OF WARRANTS
We
may offer to sell warrants from time to time. If we do so, we will describe the specific terms of the warrants in a prospectus
supplement. In particular, we may issue warrants for the purchase of common stock, preferred stock and/or debt securities in one
or more series. We may also issue warrants independently or together with other securities and the warrants may be attached to
or separate from those securities.
We
will evidence each series of warrants by warrant certificates that we will issue under a separate agreement. We will enter into
the warrant agreement with a warrant agent. We will indicate the name and address of the warrant agent in the applicable prospectus
supplement relating to a particular series of warrants.
We
will describe in the applicable prospectus supplement the terms of the series of warrants, including:
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the
offering price and aggregate number of warrants offered;
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the
currency for which the warrants may be purchased;
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if
applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued
with each such security or each principal amount of such security;
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●
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if
applicable, the date on and after which the warrants and the related securities will be separately transferable;
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in
the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one
warrant and the price at, and currency in which, this principal amount of debt securities may be purchased upon such exercise;
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●
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in
the case of warrants to purchase common stock or preferred stock, the number of shares of common stock or preferred stock,
as the case may be, purchasable upon the exercise of one warrant and the price at which these shares may be purchased upon
such exercise;
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●
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the
effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants;
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●
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the
terms of any rights to redeem or call the warrants;
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any
provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants;
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the
dates on which the right to exercise the warrants will commence and expire;
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the
manner in which the warrant agreement and warrants may be modified;
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certain
United States federal income tax consequences of holding or exercising the warrants;
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the
terms of the securities issuable upon exercise of the warrants; and
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any
other specific material terms, preferences, rights or limitations of or restrictions on the warrants.
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Holders
may exercise the warrants by delivering the warrant certificate representing the warrants to be exercised together with other
requested information, and paying the required amount to the warrant agent in immediately available funds, as provided in the
applicable prospectus supplement. We will set forth in the applicable prospectus supplement the information that the holder of
the warrant will be required to deliver to the warrant agent.
Upon
receipt of the required payment and the warrant certificate properly completed and duly executed at the office of the warrant
agent or any other office indicated in the applicable prospectus supplement, we will issue and deliver the securities purchasable
upon such exercise. If a holder exercises fewer than all of the warrants represented by the warrant certificate, then we will
issue a new warrant certificate for the remaining amount of warrants.
Holder
will not have any of the rights of the holders of the securities purchasable upon the exercise of warrants until you exercise
them. Accordingly, holder will not be entitled to, among other things, vote or receive dividend payments or similar distributions
on the securities you can purchase upon exercise of the warrants.
The
information provided above is only a summary of the terms under which we may offer warrants for sale. Accordingly, investors must
carefully review the applicable warrant agreement for more information about the specific terms and conditions of these warrants
before investing in us. In addition, please carefully review the information provided in the applicable prospectus supplement,
which contains additional information that is important for you to consider in evaluating an investment in our securities.
DESCRIPTION
OF RIGHTS
We
may issue rights to our stockholders to purchase shares of our common stock or preferred stock described in this prospectus. We
may offer rights separately or together with one or more additional rights, preferred stock, common stock, warrants or any combination
of those securities in the form of units, as described in the applicable prospectus supplement. Each series of rights will be
issued under a separate rights agreement to be entered into between us and a bank or trust company, as rights agent. The rights
agent for any rights we offer will be set forth in the applicable prospectus supplement. The rights agent will act solely as our
agent in connection with the certificates relating to the rights of the series of certificates and will not assume any obligation
or relationship of agency or trust for or with any holders of rights certificates or beneficial owners of rights. The following
description sets forth certain general terms and provisions of the rights to which any prospectus supplement may relate. The particular
terms of the rights to which any prospectus supplement may relate and the extent, if any, to which the general provisions may
apply to the rights so offered will be described in the applicable prospectus supplement. To the extent that any particular terms
of the rights, rights agreement or rights certificates described in a prospectus supplement differ from any of the terms described
below, then the terms described below will be deemed to have been superseded by that prospectus supplement. We encourage you to
read the applicable rights agreement and rights certificate for additional information before you decide whether to purchase any
of our rights.
The
prospectus supplement relating to any rights that we offer will include specific terms relating to the offering, including, among
other matters:
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the
date of determining the stockholders entitled to the rights distribution;
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the
aggregate number of shares of common stock, preferred stock or other securities purchasable upon exercise of the rights;
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the
exercise price;
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●
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the
aggregate number of rights issued;
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whether
the rights are transferrable and the date, if any, on and after which the rights may be separately transferred;
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●
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the
date on which the right to exercise the rights will commence, and the date on which the right to exercise the rights will
expire;
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●
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the
method by which holders of rights will be entitled to exercise;
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●
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the
conditions to the completion of the offering;
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the
withdrawal, termination and cancellation rights;
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whether
there are any backstop or standby purchaser or purchasers and the terms of their commitment;
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●
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whether
stockholders are entitled to oversubscription right;
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●
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any
U.S. federal income tax considerations; and
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●
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any
other terms of the rights, including terms, procedures and limitations relating to the distribution, exchange and exercise
of the rights.
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If
less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to
persons other than stockholders, to or through agents, underwriters or dealers or through a combination of such methods, including
pursuant to standby arrangements, as described in the applicable prospectus supplement. In connection with any rights offering,
we may enter into a standby underwriting or other arrangement with one or more underwriters or other persons pursuant to which
such underwriters or other persons would purchase any offered securities remaining unsubscribed for after such rights offering.
DESCRIPTION
OF UNITS
We
may issue units consisting of any combination of the other types of securities offered under this prospectus in one or more series.
We may evidence each series of units by unit certificates that we will issue under a separate agreement. We may enter into unit
agreements with a unit agent. We will indicate the name and address of the unit agent in the applicable prospectus supplement
relating to a particular series of units.
The
following description, together with the additional information included in any applicable prospectus supplement, summarizes the
general features of the units that we may offer under this prospectus. You should read any prospectus supplement and any free
writing prospectus that we may authorize to be provided to you related to the series of units being offered, as well as the complete
unit agreements that contain the terms of the units. Specific unit agreements will contain additional important terms and provisions
and we will file as an exhibit to the registration statement of which this prospectus is a part, or will incorporate by reference
from another report that we file with the SEC, the form of each unit agreement relating to units offered under this prospectus.
If
we offer any units, certain terms of that series of units will be described in the applicable prospectus supplement, including,
without limitation, the following, as applicable:
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the
title of the series of units;
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●
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identification
and description of the separate constituent securities comprising the units;
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●
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the
price or prices at which the units will be issued;
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●
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the
date, if any, on and after which the constituent securities comprising the units will be separately transferable;
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●
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a
discussion of certain United States federal income tax considerations applicable to the units; and
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any
other terms of the units and their constituent securities.
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PLAN
OF DISTRIBUTION
We
may sell the securities from time to time pursuant to underwritten public offerings, negotiated transactions, block trades or
a combination of these methods or through underwriters or dealers, through agents and/or directly to one or more purchasers. The
securities may be distributed from time to time in one or more transactions:
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at
a fixed price or prices, which may be changed;
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at
market prices prevailing at the time of sale;
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at
prices related to such prevailing market prices; or
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at
negotiated prices.
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Each
time that we sell securities covered by this prospectus, we will provide a prospectus supplement or supplements that will describe
the method of distribution and set forth the terms and conditions of the offering of such securities, including the offering price
of the securities and the proceeds to us, if applicable.
Offers
to purchase the securities being offered by this prospectus may be solicited directly. Agents may also be designated to solicit
offers to purchase the securities from time to time. Any agent involved in the offer or sale of our securities will be identified
in a prospectus supplement.
If
a dealer is utilized in the sale of the securities being offered by this prospectus, the securities will be sold to the dealer,
as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the
time of resale.
If
an underwriter is utilized in the sale of the securities being offered by this prospectus, an underwriting agreement will be executed
with the underwriter at the time of sale and the name of any underwriter will be provided in the prospectus supplement that the
underwriter will use to make resales of the securities to the public. In connection with the sale of the securities, we or the
purchasers of securities for whom the underwriter may act as agent, may compensate the underwriter in the form of underwriting
discounts or commissions. The underwriter may sell the securities to or through dealers, and those dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for which they
may act as agent. Unless otherwise indicated in a prospectus supplement, an agent will be acting on a best efforts basis and a
dealer will purchase securities as a principal, and may then resell the securities at varying prices to be determined by the dealer.
Any
compensation paid to underwriters, dealers or agents in connection with the offering of the securities, and any discounts, concessions
or commissions allowed by underwriters to participating dealers will be provided in the applicable prospectus supplement. Underwriters,
dealers and agents participating in the distribution of the securities may be deemed to be underwriters within the meaning of
the Securities Act of 1933, as amended, and any discounts and commissions received by them and any profit realized by them on
resale of the securities may be deemed to be underwriting discounts and commissions. We may enter into agreements to indemnify
underwriters, dealers and agents against civil liabilities, including liabilities under the Securities Act, or to contribute to
payments they may be required to make in respect thereof and to reimburse those persons for certain expenses.
Any
common stock will be listed on the Nasdaq Capital Market, but any other securities may or may not be listed on a national securities
exchange. To facilitate the offering of securities, certain persons participating in the offering may engage in transactions that
stabilize, maintain or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities,
which involve the sale by persons participating in the offering of more securities than were sold to them. In these circumstances,
these persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their
over-allotment option, if any. In addition, these persons may stabilize or maintain the price of the securities by bidding for
or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating
in the offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The
effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might
otherwise prevail in the open market. These transactions may be discontinued at any time.
We
may engage in at the market offerings into an existing trading market in accordance with Rule 415(a)(4) under the Securities Act.
In
addition, we may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third
parties in privately negotiated transactions. If the applicable prospectus supplement so indicates, in connection with those derivatives,
the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short
sale transactions. If so, the third party may use securities pledged by us or borrowed from us or others to settle those sales
or to close out any related open borrowings of stock, and may use securities received from us in settlement of those derivatives
to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and, if not
identified in this prospectus, will be named in the applicable prospectus supplement (or a post-effective amendment). In addition,
we may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell the securities
short using this prospectus and an applicable prospectus supplement. Such financial institution or other third party may transfer
its economic short position to investors in our securities or in connection with a concurrent offering of other securities.
We
do not make any representation or prediction as to the direction or magnitude of any effect that the transactions described above
might have on the price of the securities. In addition, we do not make any representation that underwriters will engage in such
transactions or that such transactions, once commenced, will not be discontinued without notice.
The
specific terms of any lock-up provisions in respect of any given offering will be described in the applicable prospectus supplement.
To
comply with applicable state securities laws, the securities offered by this prospectus will be sold, if necessary, in such jurisdictions
only through registered or licensed brokers or dealers. In addition, securities may not be sold in some states unless they have
been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement
is available and is complied with.
The
underwriters, dealers and agents may engage in transactions with us, or perform services for us, in the ordinary course of business
for which they receive compensation.
LEGAL
MATTERS
Lucosky
Brookman LLP will pass upon certain legal matters relating to the issuance and sale of the securities offered hereby on behalf
of Esports Entertainment Group, Inc. Additional legal matters may be passed upon for us or any underwriters, dealers or agents,
by counsel that we will name in the applicable prospectus supplement.
EXPERTS
Our
consolidated balance sheets as of June 30, 2020 and 2019, and the related consolidated statements of operations, stockholders’
equity (deficit), and cash flows for each of those two years have been audited by Rosenberg Rich Baker Berman, P.A., an independent
registered public accounting firm, as set forth in its report incorporated by reference and are included in reliance upon such
report given on the authority of such firm as experts in accounting and auditing.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution
The
following is an estimate of the expenses (all of which are to be paid by the registrant) that we may incur in connection with
the securities being registered hereby.
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SEC
registration fee
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$
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10,910.00
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FINRA
filing fee
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*
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Printing
expenses
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*
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Legal
fees and expenses
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*
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Accounting
fees and expenses
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*
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Blue
Sky, qualification fees and expenses
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*
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Transfer
agent fees and expenses
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*
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Trustee
fees and expenses
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*
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Warrant
agent fees and expenses
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*
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Miscellaneous
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*
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Total
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$
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*
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*
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These
fees are calculated based on the securities offered and the number of issuances and accordingly cannot be estimated at this
time.
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Item
15. Indemnification of Directors and Officers
The
Nevada Revised Statutes limits or eliminates the personal liability of directors to corporations and their stockholders for monetary
damages for breaches of directors’ fiduciary duties as directors. Our Amended and Restated Bylaws include provisions that
require the company to indemnify our directors or officers against monetary damages for actions taken as a director or officer
of our Company. We are also expressly authorized to carry directors’ and officers’ insurance to protect our directors,
officers, employees and agents for certain liabilities. Our Amended and Restated Articles of Incorporation do not contain any
limiting language regarding director immunity from liability.
The
limitation of liability and indemnification provisions under the Nevada Revised Statutes and our Amended and Restated Bylaws may
discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duties. These provisions may also
have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action,
if successful, might otherwise benefit us and our stockholders. However, these provisions do not limit or eliminate our rights,
or those of any stockholder, to seek non-monetary relief such as injunction or rescission in the event of a breach of a director’s
fiduciary duties. Moreover, the provisions do not alter the liability of directors under the federal securities laws. In addition,
your investment may be adversely affected to the extent that, in a class action or direct suit, we pay the costs of settlement
and damage awards against directors and officers pursuant to these indemnification provisions.
Item
16. Exhibits
(a)
Exhibits
A
list of exhibits filed with this registration statement on Form S-3 is set forth on the Exhibit Index and is incorporated herein
by reference.
Item
17. Undertakings
The
undersigned registrant hereby undertakes:
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(1)
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To
file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
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(i)
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To
include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
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(ii)
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To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum
aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration
statement; and
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(iii)
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To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement.
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(2)
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That
for the purpose of determining any liability under the Securities Act of 1933 each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
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(3)
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To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
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(4)
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That,
for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant
to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on
Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration
statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration
statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated
by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser
with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement or made in any such document immediately prior to such
date of first use.
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(5)
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That,
for the purpose of determining liability of the registrant under the Securities Act of
1933 to any purchaser in the initial distribution of the securities:
The
undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this
registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities
are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will
be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
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(i)
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Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant
to Rule 424;
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(ii)
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Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred
to by the undersigned registrant;
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(iii)
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The
portion of any other free writing prospectus relating to the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the undersigned registrant; and
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(iv)
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Any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
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(6)
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The
undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement
certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery
to each purchaser.
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(7)
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Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in Item 14 above, or otherwise, the Registrant has been advised
that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant
of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication of such issue.
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(8)
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The
undersigned Registrant hereby undertakes:
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(1)
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That
for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4), or 497(h) under the Securities Act shall be deemed to be part of this registration statement
as of the time it was declared effective.
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(2)
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That
for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and this offering
of such securities at that time shall be deemed to be the initial bona fide offering thereof.
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SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Toronto, Ontario, on January 25, 2021.
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Esports
Entertainment Group, Inc.
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By:
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/s/
Grant Johnson
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Name:
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Grant
Johnson
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Title:
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Chief
Executive Officer, and
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Chairman
of the Board of Directors
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(Principal
Executive Officer)
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POWER
OF ATTORNEY: KNOW ALL PERSONS BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints Grant
Johnson, his true and lawful attorneys-in-fact and agents with full power of substitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement,
and to sign any registration statement for the same offering covered by the Registration Statement that is to be effective upon
filing pursuant to Rule 462(b) promulgated under the Securities Act, and all post-effective amendments thereto, and to file the
same, with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or his, her or their
substitute or substitutes, may lawfully do or cause to be done or by virtue hereof.
Pursuant
to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
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Signature
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Title
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Date
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/s/
Grant Johnson
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Chief
Executive Officer, and
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|
January
25, 2021
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Grant
Johnson
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Chairman
of the Board of Directors (Principal Executive Officer)
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/s/
Daniel Marks
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Chief
Financial Officer
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January
25, 2021
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Daniel
Marks
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|
(Principal Accounting Officer and Principal
Financial Officer)
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/s/
Stuart Tilly
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Chief
Legal Officer, Secretary, and Director
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January
25, 2021
|
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Stuart
Tilly
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/s/
Damian Mathews
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Director
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|
January
25, 2021
|
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Damian
Mathews
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/s/
Chul Woong Lim
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Director
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January
25, 2021
|
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Chul
Woong Lim
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/s/
Alan Alden
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Director
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January
25, 2021
|
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Alan
Alden
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/s/
Warwick Bartlett
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Director
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January
25, 2021
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Warwick
Bartlett
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EXHIBIT
INDEX
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*
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Filed
herewith.
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**
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To
be filed by amendment.
|
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